On Friday, solar photovoltaic products developer, DayStar Technologies, Inc. announced agreements to extinguish approximately $1 million in outstanding debts.

Fourteen of DayStar’s vendors have reached agreements with Socius CG II, Ltd., under which Socius purchased approximately $1 million of the aggregate amount of debt. The remainder of the amount owed was settled in exchange for free-trading shares of DayStar’s common stock. The debts pertaining to this transaction will initially be settled in exchange for approximately 325,000 free-trading shares of DayStar’s common stock, subject to final adjustment.

Per the agreements, the initial number of shares to be issued to Socius will be adjusted on the 21st trading day following the date on which the initial shares were first issued. The aggregate number of shares of common stock issued to Socius will not exceed 9.99% of the total number of shares of the company’s common stock outstanding, under any circumstance. Details of the Socius and DayStar agreements are set forth in a Current Report on Form 8-K filed with the SEC today.

DayStar CEO, Magnus Ryde, commented, “We are pleased to have Socius as a new financial partner as we pursue opportunities to manufacture our CIGS modules offshore. As we stated on July 22, 2010, we are pursuing partnerships to implement this strategy. Those potential partnerships, if consummated, could include joint ventures, licensing agreements, contract manufacturing agreements, a reverse merger with or an acquisition of DayStar. It is clear to us that we need to continue to restructure our balance sheet and reduce debt to achieve the best opportunity for increased shareholder value. We are making very significant progress on this important initiative.”

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